Home' Trinidad and Tobago Guardian : October 2nd 2016 Contents The Minister is proposing to stimulate the
local agricultural sector by introducing an in-
centive whereby all agro-processing operations
will be tax free. The Ministry of Agriculture,
Land and Fisheries will be responsible for the
In order to qualify for the tax relief, the fol-
lowing criteria would have to be met:
• At least 75% of the processing of agricul-
tural products must be done in T&T; and
• 75% of the ingredients must be produced
or harvested locally.
We await the passage of the legislation to
provide further clarity on what constitutes
"agro-processing". It is noteworthy that succes-
sive governments have introduced tax incen-
tives for various sectors of the economy that
have been ineffective due to the bureaucracy
encountered by companies seeking to take ad-
vantage of the tax incentives. It is therefore im-
perative that the certification process is not
rendered inaccessible due to unduly cumber-
T&T's food import bill has been the subject of
much concern to the government. With that
being said, the implementation of direct tax in-
centives offered to the Agricultural sector have
been scarce over the last few years.
Special arrangements will be put in place for
the existing shareholders of TTNGL and First
Citizens Holdings Limited to access the IPOs.
The Minister also indicated that the govern-
ment intends to pursue the partial divestment
of Lake Asphalt to an International Strategic
Partner who can successfully market the natu-
ral asphalt and diversify Lake Asphalt's product
line. This is expected to increase production vol-
umes, monetize the product and increase em-
ployment, particularly in the La Brea area. This
initiative is scheduled for 2017.
The Minister proposed the introduction of an
integrated Revenue Authority (RA) as well as
other measures, as needed, to improve tax ad-
ministration. The Minister expects to complete
the legislative requirements in Parliament for
the establishment of the RA in the second quar-
ter of the Fiscal Year 2017.
The Minister also stated that the RA will
allow for greater sharing of information be-
tween the BIR and the Customs and Excise Di-
vision (C&E), which is needed to reduce the
incidents of tax evasion. The new institution will
also allow for tax administration to be super-
vised by an independent board, which will be re-
sponsible for introducing high quality and
With a view to mobilizing private sector
funding within the public sector, the Minister
has proposed to institute during 2017 tax re-
liefs and fiscal incentives for Public Private
A PPP is a contractual arrangement between
a public agency and a private sector entity.
Through this agreement, the skills and assets
of each sector (public and private) are shared in
delivering a service or facility for the use of the
The government will provide 50% tax relief
and other fiscal incentives to businesses which
can provide public infrastructure and/or public
facilities, amenities and services which are cur-
rently provided exclusively by the government.
Additionally, projects which increase productiv-
ity and create meaningful employment will also
be considered for inclusion.
The government will provide a Clearing
House to evaluate proposals from the private
Pursuant to this initiative, the Minister has
indicated that the government would, in partic-
ular, be inviting proposals from the private sec-
tor for the management, operation and
maintenance of the Couva Hospital and Train-
What is an RA?
• An RA is simply a term used to describe a
governance regime for an organization en-
gaged in revenue administration, where the
regime provides for more autonomy than
that afforded a normal department in a
• The RA would result in the integration of
C&E and the BIR into a semi- autonomous
body, which will be responsible for the ad-
ministration and enforcement of the rev-
enue law in T&T, as well as the collection of
What are the problems with
the existing systems?
• The BIR currently lacks robust human re-
sources and management systems, result-
• An inability to retain competent staff
within the tax system.
• A heavy reliance on external bodies to pro-
vide funding (MoF) and perform the vital
talent recruitment function (Public Service
• Inadequate management capability and
• Inadequate staff development and training.
• Inadequate supervision of staff.
• Lack of accountability of management of
the tax administration to the MoF.
• Sub-optimal communication and data ex-
change among the existing revenue divi-
• Less than exemplary customer service.
• Low effectiveness of tax administration
and reduced levels of compliance.
• A perception that the function and purpose
of the C&E and the BIR differs significantly
and, in this regard, should not be integrated.
Would the implementation
of an RA resolve the prob-
lems in the existing system?
The implementation of an RA may resolve
some of the above-mentioned problems,
which exist in the current system. However,
there are a number of problems that can be re-
solved without the implementation of an RA.
The RA should be able to address:
• Human resource management problems:
• With semi-autonomous powers, the RA
should have the ability to implement a
human resource management function,
which (at least in theory) should facilitate
effective recruitment and selection of ap-
propriate personnel, career planning, pro-
motion and advancement, learning and
growth and development.
• Effective performance management sys-
tems could be implemented, which would
reward/discipline staff based on perform-
• As employees of the RA would not fall
under the Public Service Commission, their
remuneration would be determined by the
RA. In this regard, remuneration of tax ad-
ministration employees can better reflect
• Less than exemplary customer service may
be addressed by both training and develop-
ment and evaluation by way of a perform-
ance management system.
• Accountability of Management
• The RA would allow for tax administration
to be supervised by an independent board,
which should be responsible for introducing
high quality and accountable management.
Is it expected that the RA
would come into existence?
• The Trinidad & Tobago Revenue Authority
Bill 2010 was piloted through Parliament by
the former PNM administration. However,
the Bill, which required a three-fifths special
majority to pass, was not supported by the
Opposition or Independents in the Upper
• We understand that the requirement for a
three-fifths special majority is mandatory
as the formation of the RA affects the
rights of the public servant under Section 4
"Recognition and declaration of rights and
freedoms" and Section 5 "Protection of
rights and freedoms" of the Constitution of
• It is uncertain whether the government can
achieve the required three- fifths special
majority that is required to pass the Bill.
With regard to high income individuals, the
following table highlights the impact of the pro- posed increase in the tax rate:
Agro-Processing Tax Relief
October 2, 2016 guardian.co.tt Sunday Guardian
The Minister has proposed to assist the less
fortunate by exempting persons whose
monthly electricity bill is $400 or less from the
first $100 in electricity charges. We note that
the Minister has stated that the Government
will bear the difference in charges in an arrange-
ment with T&TEC. This measure will take effect
from 1 December 2016.
Entrepreneurial Talent Grant
In an effort to stimulate creativity and inno-
vation in business, an Entrepreneurial Talent
Grant has been proposed. The Minister has indi-
cated that citizens will be invited and encour-
aged to participate in a national competition by
presenting innovative business concepts, for
evaluation by a panel of experienced business-
men and entrepreneurs. Every year, the top five
projects will receive a $1m grant to facilitate the
development and implementation of their busi-
Income Tax Computation Comparative
Shareholding to be sold Expected
from the term 'house' embedded in the current
housing tax incentives. We will await further
clarification on the process of claiming the
multi-family dwelling tax incentive.
Public Private Partnership (PPP)
Business Tax Relief
Sale of Assets
The Minister is proposing to dispose of the following assets to generate approximately TT$4.1b:
The National Gas Company's shareholding in
Trinidad & Tobago NGL Limited (TTNGL)
The Government of Trinidad & Tobago's sharehold-
ing in First Citizens Holdings Limited
Industrial estates under the remit of Evolving
Technologies Enterprise Development
Company Limited (eTecK)
Trinidad Generation Unlimited (TGU) to institutional
investors, such as National Insurance Board and
Trinidad & Tobago Unit Trust Corporation
High Income Earner
Income from Employment
Personal Allowance - (Note 1)
Deduction for First Time
Acquisition of House - (Note 2)
Tertiary Education (Extra-
Regional) - (Note 3)
Deduction for Approved Annuity/
Pension Plan and NIS - (Note 4)
Covenanted Donations - (Note 5)
Income Tax @ 25% - (Note 6)
Income Tax @ 30% - (Note 7)
Total Tax Liability
No proposed change for individuals earning less than $1m.
Note 1 Personal Allowance for residents increased to TT$72,000. Effective 1 January 2016.
Note 2 Tax Allowance limited to $25,000 per household in the year of income for first time home-
owners for five years including those years utilized by existing beneficiaries. Effective 1 Jan-
Note 3 Maximum allowance per household is $60,000 (i.e. spouses must share allowance).
Note 4 Maximum allowance granted for contribution to Approved Annuities/ Pension Plans and
70% of NIS Payments is $50,000. Effective 1 January 2015.
Note 5 Tax Deduction equal to the amount of donation, up to a maximum of 15% of the individual's
total income in an income year. The Income Tax Act (ITA) defines total income as the aggre-
gate amount of income of a person before making any deductions for expenses or al-
Note 6 Chargeable income up to $1m will be taxed at 25%. Effective 1 January 2017.
Note 7 Chargeable income in excess of $1m will be taxed at 30%. Effective 1 January 2017.
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